The FDA has said that the Chinese supplier which provided heparin to Baxter, Changzhou SPL, did not address all issues found during a February inspection. While the U.S. regulator has acknowledged that the plant, a joint venture with Scientific Protein Laboratories LLC of Waunakee, Wis., has sent two reports on March 17 and April 15, they do not fully respond to all "deficiencies."

Meanwhile, Chinese officials suggested at an embassy news conference that the problem with the blood thinner could have occurred in the U.S., not in China at all. They also announced plans to inspect a Baxter International Inc. (BAX) plant in Cherry Hill, N.J., where the tainted heparin was produced. The officials have also underlined that the alleged contaminant which was linked to the Chinese supplier was not found in all batches which caused dangerous allergic reactions, some of which have led to dozens of deaths.

"The oversulfated chondroitin can therefore not be a suspected root cause of heparin adverse events as reported in U.S. media previously," said Jin Shaohong, deputy director general for the National Institute for the Control of Pharmaceutical and Biological Products in China, quoted by CNN.

In March, the US Food and Drug Administration has announced that it has identified the mysterious substance which contaminated some lots of the recalled blood-thinner heparin sold by Baxter International Inc. It is a man-made chemical compound known as over-sulfated chondroitin sulfate which is much cheaper than heparin.

It appears that heparin was cut with the similar substance to reduce costs. This is further reinforced by the fact that the chondroitin sulfate was modified to mimic heparin. Normal chondroitin sulfate is used as a supplement by people suffering from joint problems.

Heparin, made from ingredients extracted from pig intestines, is used to prevent blood clots in millions of people with heart conditions, kidney disease and in surgery. The contaminant made up between 2 and 50 percent of the heparin samples tested by the FDA, which did not assert directly that the heparin was counterfeited on purpose.

In February, Baxter first recalled nine lots of the heparin after receiving hundreds of reports of allergic reactions possibly linked to heparin, as well as reports of four deaths. Shortly after, the company recalled all remaining heparin products. The other major U.S. heparin supplier, APP Pharmaceuticals Inc, ramped up production to avoid a drug shortage after the Baxter recall. Tests on APP's heparin have not turned up any contamination.